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University of Miami Law Review

Abstract

In United States v. Brewbaker, a Fourth Circuit panel overturned a criminal conviction under § 1 of the Sherman Act, holding that a bid-rigging conspiracy between direct competitors constituted a hybrid “dual distribution” arrangement subject to the rule of reason rather than per se illegality. The court’s rationale rested on the existence of a separate vertical relationship between the parties, even though that relationship served only as consideration for the horizontal agreement to rig bids.

This Comment argues that Brewbaker rests on three doctrinal errors: misclassifying established bid-rigging tactics as a “new” restraint simply because the payoff took a vertical form; prioritizing the parties’ broader business relationship over the horizontal nature of the challenged conduct; and finding potential procompetitive justifications based on a faulty “dual distribution” categorization. Because the Department of Justice Antitrust Division only pursues criminal charges for per se violations, Brewbaker creates a roadmap for conspirators to structure schemes with “vertical” payoffs as insurance against criminal liability, thereby threatening the integrity of government procurement, which relies on competitive bidding to safeguard against fraud and waste.

The Fourth Circuit’s reversal of Brewbaker—the Antitrust Division’s only criminal trial victory from 2020 to 2023—has implications that extend beyond doctrine. As the per se rule erodes and criminal enforcement correspondingly shrinks, the Antitrust Division must vigilantly defend what remains. Ultimately, this Comment urges sister circuits to reject Brewbaker’s flawed reasoning and calls on the Supreme Court to intervene if a circuit split emerges to make plain that bid-rigging, however dressed up, remains immune from the broader shift toward the rule of reason.

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